ModivCare Inc.

Q1 revenue was $650.7 million, down 5% year over year and 2% sequentially. Net loss was $50.4 million versus $22.3 million a year ago, driven mainly by higher interest expense of $38.8 million. Adjusted net loss was $24.5 million, or negative $1.71 per share, and adjusted EBITDA was $32.6 million, essentially flat year over year but down sequentially. Segment highlights included NEMT revenue of $449 million, down 6% year over year, PCS revenue of $181.8 million, and monitoring revenue of $18.1 million. Free cash flow was negative $86.2 million, cash ended at $116 million, and the revolver was fully drawn at $269 million. Management did not provide formal 2025 guidance, but said it expects meaningful improvement in cash flow generation as the year progresses, with working-capital needs declining and the majority of contract structure changes flowing through by 2026.

Heath Sampson framed the quarter around five enterprise objectives: grow and retain customers, digitize care access, simplify the operating model, improve capital efficiency, and deliver supportive care. He sounded constructive on execution, pointing to two new NEMT wins, strong digital adoption, and multiple operating changes that he said should make the business more scalable and less capital intensive. He also emphasized urgency around deleveraging and said the strategic alternatives process is being run to maximize value for stakeholders, even if timing remains disciplined.

There was no separate CFO prepared commentary; Sampson covered the financials and capital plan. He said the company is taking a company-wide G&A reduction action targeting about $25 million of annualized savings, with the majority coming from labor in corporate and shared services. On capital, he highlighted the January capital raise, $30 million collected in April from a large NCO receivable about a month early, and a shift in some NEMT contracts to faster-settling structures that should improve collection predictability. He also noted Q1 net contracts receivable of $109 million, cash of $116 million, a fully drawn $269 million revolver, and free cash flow of negative $86.2 million due to working-capital build, contract transitions, and higher interest expense.

Analysts focused mainly on cash flow, the timing of debt payments, and whether the strategic alternatives review could produce a transaction this year. Management said cash flow should be assessed on an annual basis because debt payments are lumpy, and while it would not give a quarter-by-quarter forecast, it expects meaningful improvement as cost cuts, automation, and working-capital changes take hold. On receivables, management said the increase was driven by shared-risk contract structures rather than revenue weakness, and on the lost NEMT contract it said the customer consolidated with another vendor, which it viewed as a reminder to improve account management rather than a broad trend.